Uypitching v. Quiamco G.R. No. 146322

G.R. NO. 146322, December 06, 2006

ERNESTO RAMAS UYPITCHING AND RAMAS UYPITCHING SONS, INC., PETITIONERS, VS. ERNESTO QUIAMCO, RESPONDENT .
CORONA, J.:

FACTS:

Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not to injure others and to give everyone his due. These supreme norms of justice are the underlying principles of law and order in society.

In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan,^[2] Josefino Gabutero and Raul Generoso to amicably settle the civil aspect of a criminal case for robbery^[3] filed by Quiamco against them. They surrendered to him a red Honda XL-100 motorcycle and a photocopy of its certificate of registration. Respondent asked for the original certificate of registration but the three accused never came to see him again. Meanwhile, the motorcycle was parked in an open space inside respondent's business establishment, Avesco-AVNE Enterprises, where it was visible and accessible to the public.

It turned out that, in October 1981, the motorcycle had been sold on installment basis to Gabutero by petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managed by petitioner Atty. Ernesto Ramas Uypitching. To secure its payment, the motorcycle was mortgaged to petitioner corporation.^[4]

When Gabutero could no longer pay the installments, Davalan assumed the obligation and continued the payments. In September 1982, however, Davalan stopped paying the remaining installments and told petitioner corporation's collector, Wilfredo Veraño, that the motorcycle had allegedly been "taken by respondent's men."

Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by policemen,^[5] went to Avesco-AVNE Enterprises to recover the motorcycle. The leader of the police team, P/Lt. Arturo Vendiola, talked to the clerk in charge and asked for respondent. While P/Lt. Vendiola and the clerk were talking, petitioner Uypitching paced back and forth inside the establishment uttering "Quiamco is a thief of a motorcycle."

On learning that respondent was not in Avesco-AVNE Enterprises, the policemen left to look for respondent in his residence while petitioner Uypitching stayed in the establishment to take photographs of the motorcycle. Unable to find respondent, the policemen went back to Avesco-AVNE Enterprises and, on petitioner Uypitching's instruction and over the clerk's objection, took the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or violation of the Anti-Fencing Law^[6] against respondent in the Office of the City Prosecutor of Dumaguete City.^[7] Respondent moved for dismissal because the complaint did not charge an offense as he had neither stolen nor bought the motorcycle. The Office of the City Prosecutor dismissed the complaint^[8] and denied petitioner Uypitching's subsequent motion for reconsideration.

Respondent filed an action for damages against petitioners in the RTC of Dumaguete City, Negros Oriental, Branch 37.^[9] He sought to hold the petitioners liable for the following: (1) unlawful taking of the motorcycle; (2) utterance of a defamatory remark (that respondent was a thief) and (3) precipitate filing of a baseless and malicious complaint. These acts humiliated and embarrassed the respondent and injured his reputation and integrity.

ISSUE:

Whether the filing of a complaint for qualified theft and/or violation of the Anti-Fencing Law in the Office of the City Prosecutor warranted the award of moral damages, exemplary damages, attorney's fees and costs in favor of respondent.

Petitioners' suggestion is misleading. They were held liable for damages not only for instituting a groundless complaint against respondent but also for making a slanderous remark and for taking the motorcycle from respondent's establishment in an abusive manner.

Correctness of the Findings
of the RTC and CA

As they never questioned the findings of the RTC and CA that malice and ill will attended not only the public imputation of a crime to respondent^[14] but also the taking of the motorcycle, petitioners were deemed to have accepted the correctness of such findings. This alone was sufficient to hold petitioners liable for damages to respondent.

Nevertheless, to address petitioners' concern, we also find that the trial and appellate courts correctly ruled that the filing of the complaint was tainted with malice and bad faith. Petitioners themselves in fact described their action as a "precipitate act."^[15] Petitioners were bent on portraying respondent as a thief. In this connection, we quote with approval the following findings of the RTC, as adopted by the CA:

x x x There was malice or ill-will [in filing the complaint before the City Prosecutor's Office] because Atty. Ernesto Ramas Uypitching knew or ought to have known as he is a lawyer, that there was no probable cause at all for filing a criminal complaint for qualified theft and fencing activity against [respondent]. Atty. Uypitching had no personal knowledge that [respondent] stole the motorcycle in question. He was merely told by his bill collector ([i.e.] the bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo Veraño[,] that Juan Dabalan will [no longer] pay the remaining installment(s) for the motorcycle because the motorcycle was taken by the men of [respondent]. It must be noted that the term used by Wilfredo Veraño in informing Atty. Ernesto Ramas Uypitching of the refusal of Juan Dabalan to pay for the remaining installment was [']taken['], not [']unlawfully taken['] or 'stolen.' Yet, despite the double hearsay, Atty. Ernesto Ramas Uypitching not only executed the [complaint-affidavit] wherein he named [respondent] as 'the suspect' of the stolen motorcycle but also charged [respondent] of 'qualified theft and fencing activity' before the City [Prosecutor's] Office of Dumaguete. The absence of probable cause necessarily signifies the presence of malice. What is deplorable in all these is that Juan Dabalan, the owner of the motorcycle, did not accuse [respondent] or the latter's men of stealing the motorcycle[,] much less bother[ed] to file a case for qualified theft before the authorities. That Atty. Uypitching's act in charging [respondent] with qualified theft and fencing activity is tainted with malice is also shown by his answer to the question of Cupid Gonzaga^[16] [during one of their conversations] - "why should you still file a complaint" You have already recovered the motorcycle..."[:] "Aron motagam ang kawatan ug motor." ("To teach a lesson to the thief of motorcycle.")^[17]

Moreover, the existence of malice, ill will or bad faith is a factual matter. As a rule, findings of fact of the trial court, when affirmed by the appellate court, are conclusive on this Court. We see no compelling reason to reverse the findings of the RTC and the CA.

Petitioners Abused Their
Right of Recovery as
Mortgagee(s)

Petitioners claim that they should not be held liable for petitioner corporation's exercise of its right as seller-mortgagee to recover the mortgaged vehicle preliminary to the enforcement of its right to foreclose on the mortgage in case of default. They are clearly mistaken.

True, a mortgagee may take steps to recover the mortgaged property to enable it to enforce or protect its foreclosure right thereon. There is, however, a well-defined procedure for the recovery of possession of mortgaged property: if a mortgagee is unable to obtain possession of a mortgaged property for its sale on foreclosure, he must bring a civil action either to recover such possession as a preliminary step to the sale, or to obtain judicial foreclosure.^[18]

Petitioner corporation failed to bring the proper civil action necessary to acquire legal possession of the motorcycle. Instead, petitioner Uypitching descended on respondent's establishment with his policemen and ordered the seizure of the motorcycle without a search warrant or court order. Worse, in the course of the illegal seizure of the motorcycle, petitioner Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantly disregarded the lawful procedure for the enforcement of its right, to the prejudice of respondent. Petitioners' acts violated the law as well as public morals, and transgressed the proper norms of human relations.

The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:

Art. 19. Every person must in the exercise of his rights and in the performance of his duties, act with justice, give every one his due, and observe honesty and good faith.

Article 19, also known as the "principle of abuse of right," prescribes that a person should not use his right unjustly or contrary to honesty and good faith, otherwise he opens himself to liability.^[19] It seeks to preclude the use of, or the tendency to use, a legal right (or duty) as a means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure another.^[20] The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh; there must be no intention to harm another.^[21] Otherwise, liability for damages to the injured party will attach.

In this case, the manner by which the motorcycle was taken at petitioners' instance was not only attended by bad faith but also contrary to the procedure laid down by law. Considered in conjunction with the defamatory statement, petitioners' exercise of the right to recover the mortgaged vehicle was utterly prejudicial and injurious to respondent. On the other hand, the precipitate act of filing an unfounded complaint could not in any way be considered to be in accordance with the purpose for which the right to prosecute a crime was established. Thus, the totality of petitioners' actions showed a calculated design to embarrass, humiliate and publicly ridicule respondent. Petitioners acted in an excessively harsh fashion to the prejudice of respondent. Contrary to law, petitioners willfully caused damage to respondent. Hence, they should indemnify him.^[22]

Ravina v. Villa Abrille G.R. No. 160708

G.R. No. 160708, October 16, 2009

PATROCINIA RAVINA AND WILFREDO RAVINA VS. MARY ANN P. VILLA ABRILLE, FOR HERSELF AND IN BEHALF OF INGRID D’LYN P. VILLA ABRILLE, INGREMARK D’WIGHT VILLA ABRILLE, INGRESOLL DIELS VILLA ABRILLE AND INGRELYN DYAN VILLA ABRILLE

QUISUMBING, ACTING C.J.:

FACTS:

Respondent Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. They have four children, who are also parties to the instant case and are represented by their mother, Mary Ann.

In 1982, the spouses acquired a 555-square meter parcel of land denominated as Lot 7, located in Davao City, and covered by Transfer Certificate of Title (TCT) No. T-88674 in their names. Said lot is adjacent to a parcel of land which Pedro acquired when he was still single and which is registered solely in his name under TCT No. T-26471.

Through their joint efforts and the proceeds of a loan from the Development Bank of the Philippines (DBP), the spouses built a house on Lot 7 and Pedro’s lot. The house was finished in the early 1980’s but the spouses continuously made improvements, including a poultry house and an annex.

In 1991, Pedro got a mistress and began to neglect his family. Mary Ann was forced to sell or mortgage their movables to support the family and the studies of her children. By himself, Pedro offered to sell the house and the two lots to herein petitioners, Patrocinia and Wilfredo Ravina. Mary Ann objected and notified the petitioners of her objections, but Pedro nonetheless sold the house and the two lots without Mary Ann’s consent, as evidenced by a Deed of Sale^[5]. It appears on the said deed that Mary Ann did not sign on top of her name.

On July 5, 1991 while Mary Ann was outside the house and the four children were in school, Pedro together with armed members of the Civilian Armed Forces Geographical Unit (CAFGU) and acting in connivance with petitioners^[6] began transferring all their belongings from the house to an apartment.

When Mary Ann and her daughter Ingrid Villa Abrille came home, they were stopped from entering it. They waited outside the gate until evening under the rain. They sought help from the Talomo Police Station, but police authorities refused to intervene, saying that it was a family matter. Mary Ann alleged that the incident caused stress, tension and anxiety to her children, so much so that one flunked at school.

ISSUE:

Whether petitioners patrocin[i]a ravina and wilfredo ravina are liable for damages, the same being contrary to law and evidence.^[10]

RULING:

The claim is erroneous to say the least. The manner by which respondent and her children were removed from the family home deserves our condemnation. While respondent was out and her children were in school, Pedro Villa Abrille acting in connivance with the petitioners^[21] surreptitiously transferred all their personal belongings to another place. The respondents then were not allowed to enter their rightful home or family abode despite their impassioned pleas.

Firmly established in our civil law is the doctrine that: “Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.”^[22] When a right is exercised in a manner that does not conform with such norms and results in damages to another, a legal wrong is thereby committed for which the wrong doer must be held responsible. Similarly, any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damages caused. ^[23] It is patent in this case that petitioners’ alleged acts fall short of these established civil law standards.

Bunag v. CA G.R. No. 101749

G.R. No. 101749 July 10, 1992

CONRADO BUNAG, JR., v. HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO,

REGALADO, J.:

FACTS:

On the afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-appellant to a motel or hotel where they had sexual intercourse. Later that evening, said defendant-appellant brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and wife for 21 days, or until September 29, 1973. On September 10, 1973, defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license with the Office of the Local Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant, defendant-appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage license.

Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-appellant Bunag, Jr., together with an unidentified male companion, abducted her in the vicinity of the San Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped.

ISSUE:

Whether, since action involves a breach of promise to marry, the trial court erred in awarding damages.

RULING:

It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to marry has no standing in the civil law, apart from the right to recover money or property advanced by the plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is not actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary incidents thereof.

However, the award of moral damages is allowed in cases specified in or analogous to those provided in Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of said Article 2219, any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for moral damages. ⁹ Article 21 was adopted to remedy the countless gaps in the statutes which leave so many victims of moral wrongs helpless even though they have actually suffered material and moral injury, and is intended to vouchsafe adequate legal remedy for that untold number of moral wrongs which is impossible for human foresight to specifically provide for in the statutes. ¹⁰

Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private respondent and having carnal knowledge with her against her will, and thereafter promising to marry her in order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her for twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly insensate and reprehensible transgressions which indisputably warrant and abundantly justify the award of moral and exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Article 2229 and 2234 of Civil Code.

Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis of a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the complaint therefor filed by private respondent with the Pasay City Fiscal's Office.

Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil liability ex delicto only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. ¹¹ Hence, extinction of the penal action does not carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil might arise did not exist. ¹²

In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact from which the civil case might arise did not exist. Consequently, the dismissal did not in any way affect the right of herein private respondent to institute a civil action arising from the offense because such preliminary dismissal of the penal action did not carry with it the extinction of the civil action.

The reason most often given for this holding is that the two proceedings involved are not between the same parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there are different rules as to the competency of witnesses and the quantum of evidence in criminal and civil proceedings. In a criminal action, the State must prove its case by evidence which shows the guilt of the accused beyond reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance of evidence only. ¹³ Thus, in Rillon, et al. vs. Rillon, ¹⁴ we stressed that it is not now necessary that a criminal prosecution for rape be first instituted and prosecuted to final judgment before a civil action based on said offense in favor of the offended woman can likewise be instituted and prosecuted to final judgment.

Velayo v. Shell G.R. No. L-7817

G.R. No. L-7817.  October 31, 1956.

ALFREDO M. VELAYO, in his capacity as Assignee of the insolvent COMMERCIAL AIR LINES, INC. (CALI), Plaintiff-Appellant, vs. SHELL COMPANY OF THE PHILIPPINE ISLANDS, LTD.,Defendant-Appellee, YEK HUA TRADING CORPORATION, PAUL SYCIP and MABASA & CO., intervenors.

FELIX, J.:

FACTS:

The Commercial Air Lines, Inc., which will be hereinafter referred to as CALI, is a corporation duly organized and existing in accordance with the Philippines laws and is previously engaged in air transportation business. The Shell Company of the P. I., Ltd., which will be designated as the Defendant, is on the other hand, a corporation organized under the laws of England and duly licensed to do business in the Philippines.

Since the start of CALI’s operations, its fuel needs were all supplied by the Defendant. Mr. Desmond Fitzgerald, its Credit Manager who extended credit to CALI, was in charge of the collection thereof. However, all matters referring to extensions of the term of payment had to be decided first by Mr. Stephen Crawford and later by Mr. Wildred Wooding, who represented in this country Defendant’s Board of Directors, the residence of which is in London, England.

As of August, 1948, the books of the Defendant showed a balance of P170,162.58 in its favor for goods it sold and delivered to CALI. Even before August 6, 1948, Defendant had reasons to believe that the financial condition of the CALI was for from being satisfactory.

On August 6, 1948, the management of CALI informally convened its principal creditors (excepting only the insignificant small claims) and informed them that CALI was in a state of insolvency and had to stop operation. The persons present, including Mr. Desmond Fitzgerald, signed their names and the names of the companies they represented on a memorandum pad of the law firm Quisumbing, Sycip, and Quisumbing.

What occurred in that meeting may be summarized as follows: 

xxx.

Then followed a discussion on the payment of claims of creditors and the preferences claimed for the accounts due to the employees, the Government and the National Airports Corporation. The representatives of the latter Messrs. Vicente H. Liwag, C. Dominguez and Pacifico V. Agcaoili, contended that their accounts were preferred. The other creditors disputed such contention of preference. No understanding was reached on this point and it was then generally agreed that the matter of preference be further studied by a working committee to be formed. The creditors present agreed to the formation of a working committee to continue the discussion of the payment of claims and preferences alleged by certain creditors, and it was further agreed that said working committee would supervise the preservation of the properties of the corporation while the creditors attempted to come to an understanding as to a fair distribution of the assets among them. From the latter exhibit the following is copied:

“4.  Certain specific matters such as the amount owing to the Philippine Air Lines, Inc., and the claims of Smith, Bell vs. Co., (representing Lloyds of London) that its claim should be offset against the payments which may be due to CALI from insurance claims were not taken up in detail. It was agreed that these matters together with the general question of what are preferred claims should be the subject of further discussions, but shall not interfere with the consummation of the sale in favor of PAL.

“5.  The creditors present agreed to the formation of the working committee to supervise the preservation of the properties of the corporation and agreed further that Mr. Fitzgerald shall represent the creditors as a whole in this committee. It was understood, however, that all questions relating to preference of claims can be decided only by the creditors assembled.

“6.  It was the sense of the persons present that, if possible, the insolvency court be avoided but that should the creditors not meet in agreement, then all the profits from the sale will be submitted to an insolvency court for proper division among the creditors.”

To this working committee, Mr. Desmond Fitzgerald, Credit Manager, of the Defendant, Atty. Agcaoili of the National Airports Corporation and Atty. Alexander Sycip were appointed. After the creditors present knew the balance sheet and heard the explanations of the officers of the CALI, it was their unanimous opinion that it would be advantageous not to present suits against this corporation but to strive for a fair pro-rata division of its assets, although the management of the CALI announced that in case of non-agreement of the creditors on a pro-rata division of the assets, it would file insolvency proceedings. Mr. Fitzgerald did not decline the nomination to form part of said working committee and on August 9, 1948, the 3 members thereof discussed methods of achieving the objectives of the committee as decided at the creditors’ meeting, which were to preserve the assets of the CALI and to study the way of making a fair division of all the assets among the creditors. Atty. Sycip made an offer to Mr. D. Fitzgerald to name a representative to oversee the preservation of the assets of the CALI, but Mr. Fitzgerald replied that the creditors could rely on Col. Lambert. Atty. Pacifico Agcaoili promised to refer the arguments adduced at the second meeting to the General Manager of the National Airports Corporations and to obtain the advice of the Corporate Counsel, so the negotiation with respect to the division of assets of the CALI among the creditors was left pending or under advice when on that very day of the meeting of the working committee, August 9, 1948, which Mr. Fitzgerald attended, Defendant effected a telegraphic transfer of its credit against the CALI to the American corporation Shell Oil Company, Inc., assigning its credit, amounting to $79,440.00, which was subsequently followed by a deed of assignment of credit dated August 10, 1948, the credit amounting this time to the sum of $85,081.29.

ISSUE:

(1)  Whether or not under the facts of the case, the Defendant Shell Company of the P. I., Ltd., taking advantage of its knowledge of the existence of CALI’s airplane C-54 at the Ontario International Airport within the Country of San Bernardino, State of California, U. S. A.,

(Which knowledge it acquired: first at the informal luncheon-meeting of the principal creditors of CALI on August 5, 1948, where its Credit Manager, Mr. Desmond Fitzgerald, was selected to form part of the Working Committee to supervise the preservation of CALI’s properties and to study the way of making a fair division of all the assets among the creditors and thus avoid the institution of insolvency proceedings in court;  and

Subsequently, at the meeting of August 9, 1948, when said Mr. Fitzgerald met the other members of the said Working Committee and heard and discussed the contention of certain creditors of CALI — on the accounts due the employees, the Government and the National Airports Corporation — who alleged that their claims were preferred),

acted in bad faith and betrayed the confidence and trust of the other creditors of CALI present in said meeting by affecting a hasty telegraphic transfer of its credit to the American corporation Shell Oil Company, Inc., for the sum of $79,440 which was subsequently followed by a deed of assignment of credit dated August 10, 1948, amounting this time to the sum of $85,081.28 (Exhs. Z), thus defeating the purpose of the informal meetings of CALI’s principal creditors end depriving the Plaintiff, as its Assignee, of the means of obtaining said C-54 plane, or the value thereof, to the detriment and prejudice of the other CALI’s creditors who were consequently deprived of their share in the distribution of said value;  and

(2) Whether or not by reason of said betrayal of confidence and trust, Defendant may be made under the law to answer for the damages prayed by the Plaintiff; and if so, what should be the amount of such damages.

We see that Plaintiff, as Assignee of the Insolvent CALI, had personality and authority to institute this case for damages,

Whether the payment of damages sought to be recovered from Defendant may be ordered under the Law and the evidence of record.

RULING:

IF ANY PERSON, before the assignment is made, having notice of the commencement of the proceedings in insolvency, or having reason to believe that insolvency proceedings are about to be commenced, embezzles or disposes of any money, goods, chattels, or effects of the insolvent, he is chargeable therewith, and liable to an action by the assignee for double the value of the property sought to be embezzled or disposed of, to be received for the benefit of the insolvent estate.

The writer of this decision does not entertain any doubt that the Defendant — taking advantage of his knowledge that insolvency proceedings were to be instituted by CALI if the creditors did not come to an understanding as to the manner of distribution of the insolvent asset among them, and believing it most probable that they would not arrive at such understanding as it was really the case — schemed and effected the transfer of its sister corporation in the United States, where CALI’s plane C-54 was by that swift and unsuspected operation efficaciously disposed of said insolvent’s property depriving the latter and the Assignee that was latter appointed, of the opportunity to recover said plane. In addition to the aforementioned Section 37, Chapter 2 of the PRELIMINARY TITLE of the Civil Code, dealing on Human Relations, provides the following: “Art 19.  Any person must, in the exercise of his rights and in the performances of his duties, act with justice, give everyone his due and observe honesty and good faith”.

It maybe said that this article only contains a mere declarations of principles and while such statement may be is essentially correct, yet We find that such declaration is implemented by Article 21 and sequence of the same Chapter which prescribe the following: “Art. 21. Any person who wilfully causes loss or injury to; another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage”.

The Code Commission commenting on this article, says the following: “Thus at one stroke, the legislator, if the forgoing rule is approved (as it was approved), would vouchsafe adequate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to provide for specifically in the statutes.

“But, it may be asked, would this proposed article obliterate the boundary line between morality and law? The answer is that, in the last analysis, every good law draws its breath of life from morals, from those principles which are written with words of fire in the conscience of man. If this premises is admitted, then the proposed rule is a prudent earnest of justice in the face of the impossibility of enumerating, one by one, all wrongs which cause damages. When it is reflected that while codes of law and statutes have changed from age to age, the conscience of man has remained fixed to its ancient moorings, one cannot but feel that it is safe and salutary to transmute, as far as may be, moral norms into legal rules, thus imparting to every legal system that enduring quality which ought to be one of its superlative attributes.

“Furthermore, there is no belief of more baneful consequence upon the social order than that a person may with impunity cause damage to his fellow-men so long as he does not break any law of the State, though he may be defying the most sacred postulates of morality. What is more, the victim loses faith in the ability of the government to afford him protection or relief.

“A provision similar to the one under consideration is embodied in article 826 of the German Civil Code.

“The same observations may be made concerning injurious acts that are contrary to public policy but are not forbidden by statute. There are countless acts of such character, but have not been foreseen by the lawmakers. Among these are many business practices that are unfair or oppressive, and certain acts of landholders and employers affecting their tenants and employees which contravene the public policy of social justice.

“Another rule is expressed in Article 24 which compels the return of a thing acquired ‘without just or legal grounds’. This provision embodies the doctrine that no person should unjustly enrich himself at the expense of another, which has been one of the mainstays of every legal system for centuries. It is most needful that this ancient principles be clearly and specifically consecrated in the proposed Civil Code to the end that in cases not foreseen by the lawmaker, no one may unjustly benefit himself to the prejudice of another. The German Civil Code has a similar provision (art. 812).” (Report of the Code Commission on the Proposed Civil Code of the Philippines, p. 40- 41).

From the Civil Code Annotated by Ambrosio Padilla, Vol. I, p. 51, 1956 edition, We also copy the following: “A moral wrong or injury, even if it does not constitute a violation of a statute law, should be compensated by damages. Moral damages (Art. 2217) may be recovered (Art. 2219). In Article 20, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy.”

Now, if Article 23 of the Civil Code goes as far as to provide that: “Even if an act or event causing damage to another’s property was not due to the fault or negligence of the Defendant, the latter shall be liable for indemnity if through the act or event he was benefited.”, with mere much more reason the Defendant should be liable for indemnity for acts it committed in bad faith and with betrayal of confidence.

It may be argued that the aforequoted provisions of the Civil Code only came into effect on August 30, 1950, and that they cannot be applicable to acts that took place in 1948, prior to its effectivity. But Article 2252 of the Civil Code, though providing that: “Changes made and new provisions and rules laid down by this Code which may be prejudice or impair vested or acquired rights in accordance with the old legislation, shall have no retroactive effect.” implies that when the new provisions of the Code does nor prejudice or impair vested or acquired rights in accordance with the old legislation — and it cannot be alleged that in the case at bar Defendant had any vested or acquired right to betray the confidence of the insolvent CALI or of its creditors — said new provisions, like those on Human Relations, can be given retroactive effect. Moreover, Article 2253 of the Civil Code further provides: “ But if a right should be declared for the first time in this Code, it shall be effective at once, even though the act or event which may give rise thereto may have been done or may have occurred under the prior legislation, provided said new right does not prejudice or impair any vested or acquired right, of the same origin.” and according to Article 2254, “no vested or acquired right can arise from acts or omissions which are against the law or which infringe upon the right of others.”

In case of Juan Castro vs. Acro Taxicab Company, (82 Phil., 359;  47 Off. Gaz., [5] 2023), one of the question at issue was whether or not the provisions of the New Civil Code of the Philippines on moral damages should be applied to an act of negligence which occurred before the effectivity of said code, and this Court, through Mr. Justice Briones, sustaining the affirmative proposition and citing decisions of the Supreme Court of Spain of February 14, 1941, and November 14, 1934, as well as the comment of Mr. Castan, Chief Justice of the Supreme Court of Spain, about the revolutionary tendency of Spanish jurisprudence, said the following: “We conclude, therefore, reaffirming the doctrine laid down in the case of Lilius (59 J. F. 800) in the sense that indemnity lies for moral and patrimonial damages which include physical and pain sufferings. With this (doctrine), We effect in this jurisdiction a real symbiosis 1 of the Spanish and American Laws and, at the same time, We act in consonance with the spirit and progressive march of time” (translation)

The writer of this decision does not see any reason for not applying the provisions of Section 37 of the Insolvency Law to the case at bar, specially if We take into consideration that the term “any person” used therein cannot be limited to the officers or employee of the insolvent, as no such limitation exist in the wording of the section (See also Sec. 38 of the same Act), and that, as stated before, the Defendant schemed and affected the transfer of its credits (from which it could derive practically nothing) to its sister corporation in the United States where CALI’s plane C-54 was then situated, succeeding by such swift and unsuspected operation in disposing of said insolvent’s property by removing it from the possession and ownership of the insolvent. However, some members of this Court entertain doubt as to the applicability of said section 37 because in their opinion what Defendant in reality disposed of was its own credit and not the insolvent’s property, although this was practically the effect and result of the scheme. Having in mind this objection and that the provisions of Article 37 making the person coming within its purview liable for double the value of the property sought to be disposed of constitute a sort of penal clause which shall be strictly construed, and considering further that the same result may be obtained, by applying only the provisions of the Civil Code, the writer of this decision yields to the objection aforementioned.

Articles 2229, 2232, 2234, 2142, and 2143 of the Civil Code read as follows: “Art. 2229.  Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.”

“Art. 2232. In contracts quasi-contracts, the Court may award exemplary damages if the Defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.”

“Art. 2234.  While the amount of the exemplary damages need not be proved, the Plaintiff must show that he is entitled to moral, temperate, or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. In case liquidated damages should be upon, although no proof of loss is necessary in order that such liquidated damages be recovered, nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the Plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages.”

“Art. 2142.  Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of another.”

“Art, 2143.  The provisions for quasi-contracts in this Chapter do not exclude other quasi-contracts which may come within the purview of the preceding article.”

In accordance with these quoted provisions of the Civil Code, We hold Defendant liable to pay to the Plaintiff, for the benefit of the insolvent CALI and its creditors, as compensatory damages a sum equivalent to the value of the plane at the time aforementioned and another equal sum as exemplary damages.

There is no clear proof in the record about the real value of CALI’s plane C-54 at the time when Defendant’s credit was assigned to its sister corporation in the United States.

RESOLUTION

July 30, 1957

FELIX, J.:

ISSUE:

Whether Plaintiff’s right of action was based and prosecuted in the lower court under the provisions of the Insolvency Law and consequently that he is stopped from pursuing another theory and is not entitled to damages under the provisions of the New Civil Code.

RULING:

As to the fifth question raised by counsel for Appellee in the course of his oral argument at the hearing in the City of Baguio of his motion, i.e., “that Plaintiff’s right of action was based and prosecuted in the lower court under the provisions of the Insolvency Law and he is, therefore, stopped from pursuing on appeal another theory under which he might be entitled to damages in consonance with the provisions of the new Civil Code”, We may invoke the decision in the case of Dimaliwat vs. Asuncion, 59 Phil., 396, 401. In that decision We said the following:

“Vicente Dimaliwat contends that Esperanza Dimaliwat has no right to claim the ownership of the property in question to the exclusion of the children of the third marriage, under the foregoing provisions of the Civil Code, because the case was not tried on that theory in the lower court. We find no merit in that contention. The decision cited are not in point. Articles 968 and 969 of the Civil Code are rules of substantive law, and if they are applicable to the facts of this case they must be given effect.”

The same thing can be said in the case at bar. Articles 19, 21, 2229, 2232, 2234, 2142 and 2143 of the new Civil Code are rules of substantive law, and if they are applicable to the facts of this case, which We hold they do, they must be made operative and given effect in this litigation.

x x x                    x x x                    x x x

It maybe seen from the foregoing that the above mentioned grounds on which the motion for reconsideration of the Defendant Shell stand, are not well taken. However, and despite this finding, We insist to delve in the question of whether the exemplary damages imposed in this Court upon Defendant Appellee, which the latter’s counsel contends to be inequitable and unfair, may be modified.

It will be remembered that this case was looked into from the point of view of the provisions of Section 37 of the Insolvency Law.

The writer of the decision was then and still is of the opinion that the provisions of this section were applicable to the case, and accordingly, that Defendant Shell was liable in this action instituted by the Assignee for double the value of the property disposed of, to be received for the benefit of the Insolvent estate. However, some of the members of this Court, for the reasons already stated in the decision, entertained some doubt as to the applicability of said Section 37, and yielding to their objections the writer of the decision turned his eyes to the provisions of the new Civil Code, inasmuch as the same result could be achieved. In the case at bar, it cannot be denied that:

“Defendant — taking advantage of his knowledge that insolvency proceedings were to be instituted by CALI if the creditors did not come to an understanding as to the manner of distribution of the insolvent assets among them, and believing as most probable that they would not arrive at such understanding, as it was really the case- schemed and effected the transfer of its credit to its sister corporation in the United States where CALI’s plane C-54 was and by this swift and unsuspected operation efficaciously disposed of said insolvent’s property depriving the latter and the Assignee that was later appointed, of the opportunity to recover said plane.”

These acts of Defendant Shell come squarely within the sanction prescribed by Congress by similar acts and no reflection can be reasonably cast on Us if in the measure of the exemplary damages that were to be imposed upon Defendant-Appellee, We were influenced by the provisions of Section 37 of the Insolvency Law. In this connection it is to be noted that, according to the Civil Code, exemplary or corrective damages are imposed by way of example or correction for the public good, in addition of the moral, temperate, liquidated or compensatory damages Art. 2229, and that the amount of the exemplary damages need not be proved (Art. 2234), for it is left to the sound discretion of the Court.

Notwithstanding the foregoing, a majority of this Court was of the belief that the value of CALI’s plane C-54, at the time when Defendant’s credit was assigned to its sister corporation in the United States, might result quite high, and that exemplary damages should not be left to speculation but properly determined by a certain and fixed amount. So they voted for the reconsideration of the decision with regard to the amount of exemplary damages which this Court fixed at P25,000.00.

Vestil v. IAC G.R. No. 74431

G.R. No. 74431 November 6, 1989

PURITA MIRANDA VESTIL and AGUSTIN VESTIL, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, DAVID UY and TERESITA UY, respondents.

CRUZ, J.:

FACTS:

On July 29, 1915, Theness was bitten by a dog while she was playing with a child of the petitioners in the house of the late Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was rushed to the Cebu General Hospital, where she was treated for "multiple lacerated wounds on the forehead" ¹ and administered an anti-rabies vaccine by Dr. Antonio Tautjo. She was discharged after nine days but was readmitted one week later due to "vomiting of saliva." ² The following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia. ³

Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy," the dog that bit and eventually killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bite Theness. After trial, Judge Jose R. Ramolete of the Court of First Instance of Cebu sustained the defendants and dismissed the complaint. ⁴

ISSUE:

In the proceedings now before us, Purita Vestil insists that she is not the owner of the house or of the dog left by her father as his estate has not yet been partitioned and there are other heirs to the property.

RULING:

Pursuing the logic of the Uys, she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because she is one of Miranda's heirs. However, that is hardly the point. What must be determined is the possession of the dog that admittedly was staying in the house in question, regardless of the ownership of the dog or of the house.

Article 2183 reads as follows:

The possessor of an animal or whoever may make use of the same is responsible for the damage which it may cause, although it may escape or be lost. 'This responsibility shall cease only in case the damages should come from force majeure from the fault of the person who has suffered damage.

Thus, in Afialda v. Hisole, ⁶ a person hired as caretaker of a carabao gored him to death and his heirs thereupon sued the owner of the animal for damages. The complaint was dismissed on the ground that it was the caretaker's duty to prevent the carabao from causing injury to any one, including himself.

While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's estate, there is no doubt that she and her husband were its possessors at the time of the incident in question. She was the only heir residing in Cebu City and the most logical person to take care of the property, which was only six kilometers from her own house. ¹³ Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly, according to at least one witness, ¹⁴ and used it virtually as a second house. Interestingly, her own daughter was playing in the house with Theness when the little girl was bitten by the dog. ¹⁵ The dog itself remained in the house even after the death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred. It is also noteworthy that the petitioners offered to assist the Uys with their hospitalization expenses although Purita said she knew them only casually. ¹⁶

ISSUE:

The petitioners also argue that even assuming that they were the possessors of the dog that bit Theness there was no clear showing that she died as a result thereof.

RULING:

On the contrary, the death certificate ¹⁷ declared that she died of broncho-pneumonia, which had nothing to do with the dog bites for which she had been previously hospitalized. The Court need not involve itself in an extended scientific discussion of the causal connection between the dog bites and the certified cause of death except to note that, first, Theness developed hydrophobia, a symptom of rabies, as a result of the dog bites, and second, that asphyxia broncho-pneumonia, which ultimately caused her death, was a complication of rabies. That Theness became afraid of water after she was bitten by the dog is established by the testimony of Dr. Tautjo.

On the strength of the testimony, the Court finds that the link between the dog bites and the certified cause of death has beep satisfactorily established. We also reiterate our ruling in Sison v. Sun Life Assurance Company of Canada, ²⁰ that the death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the death certificate stated a different cause of death. The petitioner's contention that they could not be expected to exercise remote control of the dog is not acceptable. In fact, Article 2183 of the Civil Code holds the possessor liable even if the animal should "escape or be lost" and so be removed from his control. And it does not matter either that, as the petitioners also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the petitioners forget that Theness was only three years old at the time she was attacked and can hardly be faulted for whatever she might have done to the animal.

According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the damage which such animal may cause. ²¹

We sustain the findings of the Court of Appeals and approve the monetary awards except only as to the medical and hospitalization expenses, which are reduced to P2,026.69, as prayed for in the complaint. While there is no recompense that can bring back to the private respondents the child they have lost, their pain should at least be assuaged by the civil damages to which they are entitled.